Credit Card Charge-Off vs. Credit Card Write-Off

In the ideal world, we would be in a position to repay all our dues without having to face the embarrassment of charge off on credit cards.

charge off vs write off

A charge-off and a write-off sound a lot alike, but they are two very different things.


The term “charge-off” equates to when a credit card account reaches 180 days past due. At that point, the credit card company is required to reclassify the account for accounting purposes. Specifically, from a performing asset to a non-performing asset for the bank.

However, even though a credit card account has been reclassified as a charged off account, the credit card company still reserves the right to pursue collection of the outstanding balance.When a person hears the term “charge-off”, they often mistakenly think that they’re in the clear and that their debt will be forgiven. Not so. If only it were that easy. As mentioned above, a charge-off is simply a reclassification of the debt, and unfortunately you still owe the money even if the account has charged off.

Credit card companies handle charged off accounts in a variety of ways:

  • Sometimes the credit card company continues on with their own in-house collection efforts on the charged off account.
  • Sometimes they outsource the charged off account to a collection agency, but the credit card company still retains ownership of the account.
  • Sometimes the credit card company sells the charged off account to a debt purchaser. Just like mortgages are bought and sold all the time, so are credit card accounts.


A “write-off” on the other hand is when a creditor forgives a portion of the balance that is legitimately owed. For example, if you owe $15,000 and a creditor agrees to settle the account for $0.50 on the dollar, they write off $7,500.

Debt Collectors And Charge-Off

When an account charges off, the credit card company will place a derogatory mark on your credit report as a way of penalizing you for not paying as agreed. This is standard procedure.

When attempting to collect an outstanding debt prior to the charge-off point (i.e. 180 days) debt collectors often make a big deal  …


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